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Tuesday, May 16, 2017

As the CFO of the company our assignment help experts explained following ways of accounting data that are used to take decisions and three accounting terms. Accounting information is needed for any financial and economic decisions. Knowledge of accounting concepts, standards and

measurement system is very essential for decision making. Accounting data are focused on the recording of past actual events. The transactions are recorded, measured and reported (Jackson, Sawyers & Jenkins, 2008). Past data are used as a guide to future estimates of different alternatives. Accounting data and information are used to make budgets and internal and external decisions. Apart from this, accounting information is used to make better decisions for resource allocation (Jackson, Sawyers & Jenkins, 2008). This information is used by internal and external decision makers for investigating, interpreting and communicating financial results.

Three Accounting Terms

Consistency is the accounting theory that should be applied in future accounting periods. This method can be changed due to valid business reason. New method will be followed for all accounting cycles and it will never affect on the accounting cycle (Schroeder, Clark & Cathey, 2010). Conservatism is another accounting term. It states that all liabilities are accounted, when there are chances that they will not occur and revenues are accounted only when they have occurred. Liabilities are important for decision makers in creating wise decisions (Schroeder, Clark & Cathey, 2010).

Materiality is the term that focuses on relevant and important facts of accounting. In this, monetary information is material and non monetary information is immaterial. Only monetary transactions are recorded and non monetary information is included in the financial statements, when the information is needed by investors to evaluate the company (Schroeder, Clark & Cathey, 2010). At the same time, transactions that not affect income in the present time but may effect in the future, are recorded in the financial statements.